Knowledge Center

Logistics and Shipping Glossary

Clear, short definitions of the abbreviations and concepts you meet in ocean and air freight, customs clearance, international payments, Incoterms® rules and warehousing. Incoterms® is a trademark of the International Chamber of Commerce.

100 terms

A

Advance Ruling: A binding decision issued by customs before import or export on the HS classification, origin or valuation method of specific goods. In Vietnam it is generally valid for up to three years.
Air Waybill (AWB): A non-negotiable air transport document issued by the airline or its agent that serves as a receipt for the goods and evidence of the contract of carriage. Unlike a bill of lading, it is not a document of title.
Arrival Notice (A/N): A notice sent by the carrier or forwarder to the consignee or notify party advising the expected arrival of cargo and the charges payable before delivery.
Authorised Economic Operator (AEO): A trader certified by customs as compliant and secure, entitled to simplified procedures such as fewer inspections and priority handling.

B

Bank Guarantee: An undertaking by a bank to pay the beneficiary if the applicant fails to perform an obligation. Demand guarantees are often issued subject to ICC URDG 758.
Bill of Exchange (Draft): A written, unconditional order by the drawer to the drawee to pay a sum of money at sight or at a future date, used in documentary collections and letters of credit.
Bill of Lading (B/L): A document issued by the carrier that acts as a receipt for goods, evidence of the contract of carriage and, when negotiable, a document of title to the cargo.
Bonded Warehouse: A customs-controlled warehouse where imported goods can be stored without paying duties until they are released for domestic use or re-exported.
Booking Confirmation: The carrier’s confirmation of space on a specific sailing or flight, showing the booking number, equipment, cut-off times and empty container release details.
Break Bulk: Cargo shipped as individual pieces, bundles or crates rather than in containers, typically heavy-lift or oversized goods loaded by crane.
Bunker Adjustment Factor (BAF): A surcharge added to ocean freight to reflect changes in fuel prices, usually revised monthly or quarterly.

C

Cargo Insurance Certificate: A document issued under an insurance policy or open cover evidencing that a specific shipment is insured, often required under CIF, CIP and L/C terms.
Cash Against Documents (CAD): A payment method in which the buyer pays to receive the shipping documents, usually through a bank, before it can take delivery of the goods.
Certificate of Origin (C/O): A document certifying the country in which goods were produced. A preferential C/O issued under a free trade agreement allows reduced or zero import duty.
CFR (Cost and Freight): An Incoterms® rule for sea transport in which the seller delivers goods on board and pays freight to the named port of destination, while risk passes to the buyer once the goods are on board.
Chargeable Weight: The weight on which freight is billed: the greater of actual gross weight and volumetric weight, calculated with the ratio used by the mode or carrier.
CIF (Cost, Insurance and Freight): An Incoterms® rule for sea transport in which the seller delivers on board, pays freight to the destination port and buys at least ICC (C) insurance for 110 percent of the contract price.
CIP (Carriage and Insurance Paid To): An Incoterms® rule for any mode in which the seller pays carriage to the named destination and buys at least ICC (A) insurance, while risk passes on delivery to the first carrier.
Commercial Invoice: The seller’s bill to the buyer showing the goods, quantities, prices, currency and terms of sale. It is the main document for customs valuation and payment.
Consignee: The party named in the transport document to receive the goods at destination.
Consolidation: Combining shipments from several shippers into one container or air shipment to reduce cost per unit.
Container Freight Station (CFS): A warehouse where LCL cargo is received, consolidated into containers for export, or unpacked and delivered after import.
Container Imbalance Charge (CIC): A surcharge to cover the cost of repositioning empty containers to locations where equipment is in short supply.
CPT (Carriage Paid To): An Incoterms® rule for any mode in which the seller pays carriage to the named destination, but risk passes to the buyer when goods are handed to the first carrier.
Cross-docking: A warehousing practice in which inbound goods are transferred directly to outbound vehicles with little or no storage time.
Currency Adjustment Factor (CAF): A surcharge on freight that compensates the carrier for exchange rate movements between the billing currency and its cost currencies.
Customs Broker: A licensed agent that prepares and submits customs declarations and handles clearance formalities on behalf of importers and exporters.
Customs Value: The value on which ad valorem import duty is calculated, generally the transaction value plus transport and insurance to the first port of import in Vietnam.
Cut-off Time: The deadline by which cargo, documents or VGM must reach the carrier or terminal to be loaded on a specific vessel or flight.

D

Dangerous Goods (DG): Substances or articles that pose a risk to health, safety or the environment and must be classified, packed, labelled and declared under the IMDG Code for sea or IATA DGR for air.
DAP (Delivered at Place): An Incoterms® rule in which the seller delivers when goods are placed at the buyer’s disposal on the arriving vehicle, ready for unloading, at the named destination.
DDP (Delivered Duty Paid): An Incoterms® rule in which the seller delivers at the named destination cleared for import with all duties and taxes paid, bearing maximum obligations.
Delivery Order (D/O): A document issued by the carrier or its agent authorising the terminal or warehouse to release cargo to the consignee.
Demurrage (DEM): A carrier charge for a laden container that remains inside the terminal beyond the agreed free time.
Detention (DET): A carrier charge for keeping a container outside the terminal beyond the free time before returning it.
Documents against Acceptance (D/A): A documentary collection in which the bank releases documents to the buyer when it accepts a time draft, with payment due at maturity.
Documents against Payment (D/P): A documentary collection, usually subject to ICC URC 522, in which the bank releases documents only when the buyer pays.
DPU (Delivered at Place Unloaded): An Incoterms® rule in which the seller delivers once goods are unloaded at the named destination; it is the only rule requiring the seller to unload.
Dunnage: Material such as timber, airbags or padding used to secure and protect cargo inside a container or hold.

E

Estimated Time of Arrival (ETA): The date and time a vessel, flight or truck is expected to arrive at its destination.
EXW (Ex Works): An Incoterms® rule in which the seller only makes goods available at its premises; the buyer bears all costs and risks, including loading and export clearance.

F

FAS (Free Alongside Ship): An Incoterms® rule for sea transport in which the seller delivers goods alongside the vessel nominated by the buyer at the named port of shipment.
FCA (Free Carrier): An Incoterms® rule for any mode in which the seller delivers goods, cleared for export, to the carrier nominated by the buyer at the named place.
Feeder Vessel: A smaller ship that carries containers between regional ports and the hub ports served by mainline vessels.
Flat Rack (FR): A container with a floor and end walls but no side walls or roof, used for heavy and oversized cargo.
FOB (Free on Board): An Incoterms® rule for sea transport in which the seller delivers goods on board the vessel nominated by the buyer at the named port of shipment.
Free Time: The number of days a carrier or terminal allows a container to stay in the port or with the customer before demurrage, detention or storage charges apply.
Freight Collect: Freight payable by the consignee at destination.
Freight Forwarder: A company that arranges transport and related services such as booking, documentation, customs and insurance on behalf of shippers.
Freight Prepaid: Freight paid by the shipper at origin before the transport document is released.
Full Container Load (FCL): A shipment that uses an entire container for one shipper, priced per container.

G

General Average (GA): A maritime principle under which all parties in a voyage share proportionately the cost of an intentional sacrifice or expense made to save the ship and cargo from a common peril.
General Rate Increase (GRI): A rate increase announced by carriers for a trade lane from a specified date.
Gross Weight (G.W.): The total weight of goods including packaging and pallets.

H

High Cube (HC): A container 9 feet 6 inches high, about 30 cm taller than a standard container.
House Air Waybill (HAWB): An air waybill issued by a forwarder to the actual shipper for cargo consolidated under the airline’s master air waybill.
House Bill of Lading (HBL): A bill of lading issued by a freight forwarder or NVOCC to the actual shipper.
HS Code: The Harmonized System code that classifies goods for customs; six digits are international and Vietnam uses eight-digit AHTN lines.

I

Incoterms®: The ICC rules that define the delivery obligations, costs and transfer of risk between seller and buyer; the current version is Incoterms® 2020.
Inland Container Depot (ICD): An inland facility for handling, storing and clearing containers, connected to seaports by road, rail or waterway.
Institute Cargo Clauses (ICC): Standard cargo insurance conditions; clauses (A) cover all risks subject to exclusions, while (B) and (C) cover named perils only.
ISBP 821: The ICC International Standard Banking Practice publication that explains how banks examine documents under UCP 600 letters of credit.
ISO Tank: A stainless steel tank in a 20-foot frame for transporting liquids, gases or powders in bulk.

L

Less than Container Load (LCL): A shipment too small to fill a container, consolidated with other cargo and charged per cubic metre or tonne.
Letter of Credit (L/C): A bank’s undertaking to pay the seller against presentation of complying documents, usually subject to ICC UCP 600.
Letter of Indemnity (LOI): A written undertaking to compensate the carrier for any loss if it releases cargo without an original bill of lading or makes a requested change.
Lift-on/Lift-off (LO/LO): Charges for lifting containers onto or off trucks at a terminal or depot.

M

Manifest: A list of all cargo on a vessel, aircraft or truck, submitted to customs before arrival or departure.
Master Air Waybill (MAWB): The air waybill issued by the airline to the forwarder covering a consolidated shipment.
Master Bill of Lading (MBL): The bill of lading issued by the ocean carrier to its direct customer, often a forwarder.
Multimodal Transport: Carriage of goods by at least two modes under a single contract and transport document.

N

Notify Party: The party named on the transport document to be informed when cargo arrives, often the buyer or its customs broker.
NVOCC: A non-vessel operating common carrier that issues its own bills of lading and acts as carrier to shippers without operating ships.

O

Open Top (OT): A container with a removable tarpaulin roof that allows loading from above by crane.
Out of Gauge (OOG): Cargo that exceeds the internal dimensions of a container and is shipped on flat racks or open tops at special rates.

P

Packing List (P/L): A document listing the contents, quantities, weights and dimensions of each package in a shipment.
Peak Season Surcharge (PSS): A surcharge applied by carriers during periods of high demand.

R

Reefer: A refrigerated container with an integral cooling unit that maintains a set temperature for perishable cargo.
Regional Value Content (RVC): The percentage of a product’s value originating in an FTA region, commonly required to be at least 40 percent of FOB value under ASEAN agreements.
REX (Registered Exporter System): The EU’s system of registered exporters who may self-certify origin with a statement on origin, used under EVFTA and the GSP.
Rules of Origin: The criteria in a trade agreement that determine whether goods qualify as originating, such as wholly obtained, RVC or change in tariff classification.

S

Sea Waybill (SWB): A non-negotiable transport document that allows delivery to the named consignee without presenting an original.
Shipper: The party that ships the goods and contracts with the carrier, usually the exporter.
Shipping Instruction (SI): The shipper’s details sent to the carrier or forwarder for preparing the bill of lading.
Specialised Inspection: Inspection or approval of goods by line ministries, such as quarantine, food safety or quality checks, required in addition to customs control.
Standby Letter of Credit (SBLC): A letter of credit used as a guarantee, payable on the applicant’s default, often subject to ISP98 or UCP 600.
Stuffing: Loading cargo into a container; the reverse operation is called unstuffing or devanning.
SWIFT: The global interbank messaging network used to send payment instructions, letters of credit and other financial messages.

T

Telegraphic Transfer (T/T): A bank transfer of funds by electronic message, used for advance payments or payment after shipment.
Telex Release: A carrier instruction to release cargo at destination without original bills of lading, after the originals have been surrendered at origin.
Terminal Handling Charge (THC): A charge collected per container to cover handling at the terminal at origin or destination.
TEU: Twenty-foot equivalent unit, the standard measure of container capacity; a 40-foot container equals 2 TEU.
Transhipment: Transfer of cargo from one vessel or conveyance to another at an intermediate port during transit.

U

UCP 600: The ICC Uniform Customs and Practice for Documentary Credits, the rules governing most letters of credit worldwide.
URC 522: The ICC Uniform Rules for Collections, which govern documentary and clean collections handled by banks.

V

Verified Gross Mass (VGM): The verified total weight of a packed container required by SOLAS before loading on a ship.
VNACCS/VCIS: Vietnam’s automated customs clearance and intelligence system used for electronic declarations, risk management and supervision.
Volumetric Weight: A weight calculated from a shipment’s dimensions, such as length × width × height in centimetres divided by 6,000 for air cargo.

W

Warehouse Management System (WMS): Software that controls warehouse operations such as receiving, put-away, inventory, picking and dispatch.
Weight or Measure (W/M): The LCL pricing basis under which freight is charged on cubic metres or tonnes, whichever is greater.

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